The following story is the first of a two-part series on China's recently launched tech trading board. Part 2 focuses on the top and bottom performers.
China's new Nasdaq-style board for homegrown tech firms had a spectacular start following its July 22 launch, but has struggled to maintain early highs, according to data compiled by S&P Global Market Intelligence.
Fewer than a fifth of companies listed on the Science and Technology Innovation Board, or Star Market, were trading above their first-day closing prices by mid-October, the data showed.
The board is China's first platform where pre-profit, high-tech startups and companies with dual-class shareholding structures are able to conduct initial public offerings.
The aggregate stock price of Star Market companies rose by almost 30% between July 22 and Aug. 6, well above the CSI 300 Index, a capitalization-weighted stock market index designed to replicate the performance of the top 300 stocks traded on the Shanghai and Shenzhen exchanges, the data showed.
The first day of trading saw uncommonly high pops, or percentage changes from the IPO price, for many companies. Semiconductor firm Anji Microelectronics Technology (Shanghai) Co. Ltd. experienced the biggest first day pop, at 400.15%, followed by biotech company Shenzhen Chipscreen Biosciences Co. Ltd. at 366.52% and semiconductor parts maker Amlogic (Shanghai) Co. Ltd. at 272.36%.
From the board launch to Oct. 15, the aggregate stock price, which is weighted according to market capitalization, of the 33 companies fell by 20.7%, significantly below the CSI 300 Index.
Only seven of the listed companies saw their stock price grow in the July 22 to Oct. 15 period. Beijing Worldia Diamond Tools Co. Ltd., a company that focuses on the research and development, production, sales and service of high precision diamond cutting tools, saw the most improvement at 60.11%.
The Star Market is seen as a response by the Chinese government to the offshore listing of big technology companies in recent years including Alibaba Group Holding Ltd., which raised more than US$21 billion in New York in 2014. At the time, stock exchanges in mainland China and Hong Kong did not accept listing applications from dual-class companies.